Jul 14, 2014

    Apple refutes China's claim on iPhone tracking


    APPLE assured Chinese customers that location tracking on its iPhone cannot be used to identify the activity of individuals, a day after China's state-owned television broadcaster said the software poses a security risk.

    The iPhone function can collect data and may result in a leak of state secrets, China Central Television (CCTV) reported on Friday, citing Ma Ding, head of the Online Security Institute at People's Public Security University of China.

    In response, Apple said on its Chinese website that it has never "worked with any government agency from any country to create a backdoor in any of our products or services".

    The tracking function is used to speed up applications designed to show iPhone users their own location or assist in driving directions to avoid traffic jams. It can be turned off, Apple said in its statement.

    Personal location information is stored only on the phone, protected by a user password, and is not available to third parties, the company said.

    "We appreciate CCTV's effort to help educate customers on a topic we think is very important," the company said in the statement, according to an English translation provided by Apple. "We want to make sure all of our customers in China are clear about what we do and we don't do when it comes to privacy and your personal data."

    Apple, Microsoft, Google and Facebook are among the American companies criticised by state-run media amid an escalating spat over cyber spying and hacking allegations.

    The report by CCTV on the iPhone came after China told its three state-owned wireless carriers to cut marketing expenses because they overspent on subsidies and advertising for devices such as the Apple handsets, people familiar with the matter said.

    China Mobile Communications began selling the iPhone in January after six years of negotiations. Discounts for the Apple device are one reason why subsidies on all phones will rise 29 per cent to 34 billion yuan (S$6.8 billion) this year, chief financial officer Xue Taohai said in March.

    The company has not received formal notification of the policy, said Rainie Lei, a Hong Kong-based spokesman for the listed unit, China Mobile.

    A reduction of subsidies would make high-end devices like the iPhone or Samsung Electronics' Galaxy S5 more expensive in the world's largest smartphone market. The cut would benefit domestic phone makers, including Xiaomi, Lenovo and Coolpad, which offer less costly models.

    The three state-owned carriers are China Mobile Communications, China United Network Communications and China Telecommunications. Each has a Hong Kong-listed unit.

    Apple, based in Cupertino, California, posted March-quarter sales of US$9.3 billion (S$12 billion) from the Greater China area, a region that includes Hong Kong and Taiwan, according to data compiled by Bloomberg.